In January 2016, we asked “What will procurement look like in 2020” and one of the most notable points from the discussion was “The transformation in sourcing will be led by sectors with the biggest need, those most receptive to innovation and with the technical ability to deliver change.” Scalable and transformation requires machines to reduce the burden for procurement teams.
AI-powered Sourcing Automation is now widely regarded as the key driver in agile and rapid transformation of sourcing. Businesses want actioned intelligence, not actionable intelligence because personnel are overworked. Intelligent Automation lessens the work burden and doesn’t increase it. As a category leader in this area, Keelvar is helping the world’s top procurement and SCM teams in companies such as Siemens, Coca Cola, BMW and McKesson to move forward, to innovate and to implement change.
Based on discussions with customers, we've identified the four key signs that indicate it’s time for a company to move to AI-driven Sourcing Automation.
1. Sourcing Personnel are overwhelmed with Peak Loads
Companies that regularly deal with frequent ad-hoc or intermittent requests often see peaks in demand that may be unpredictable and sourcing becomes a bottleneck. When ad hoc requests are being handled by several different people, the company may not be getting the best rates from suppliers. In a 2019 Benchmarking Report by Procurecon, 21% of CPOs who were interviewed said that supplier performance management was one of the biggest challenges within procurement today.
2. Supply Chain Disruptions are an Occupational Hazard
Unpredictability is a feature of our lives. Disasters happen, from pandemics to hurricanes or droughts, the only thing we can be certain of is uncertainty itself. Businesses that survive are those that have agile responses to such incidents. Sourcing Automation allows businesses to quickly respond and source alternatives supplies faster than competitors. In a Darwinian world, sourcing bots can be a life saver. Food, pharmaceutical and retail industries are witnessing huge disruption presently and those with sourcing bots are beating competitors to market.
3. Frequent Low-Spend Events
It’s frustrating for procurement teams to have so much of their time being wasted on tactical sourcing events of low value. Sourcing Automation is an effective solution for companies that deal with frequent ad-hoc requests. Over 70% of CPOs state that they are currently experimenting with or heavily invested in Artificial Intelligence and Machine Learning in an attempt to modernize systems and processes.
4. Predictable process flows
Automation is highly successful in situations where procurement processes are repetitive and involve a series of predictable steps with measures for quantifying the attractiveness of an offer, be it in terms of speed, quality, cost or a combination of all. Automation removes the inevitable problems of human error in procurement workflows. Monotonous procedures combined with human factors like fatigue, stress and poor communication may result in significant errors that hamper workflow. Sourcing Automation brings a high level of consistency and accuracy to work processes.
Example: Siemens & Sourcing Automation
When Siemens deployed Keelvar’s Ocean Freight Sourcing Bot, they automated 93% of the manual tasks involved in creating, operating and closing an ocean mini tender. The main pain point was that too much time was being absorbed in routine trivial tasks. Personnel needed to focus on strategically important tasks. Of the 44 different tasks that were identified in the process, Siemens were able to automate 40 time-consuming tasks, tasks that were previously done manually by the procurement team.
The concept of Sourcing Automation is very recent but Fortune 500 companies are currently deploying sourcing bots to automate processes in categories as diverse as MRO, Facilities Management and New Product Development. Intelligent Systems for Procurement are transforming the future and present of work.
Talk to the Keelvar team today to discover how intelligent Sourcing Automation can transform your business.